It's All Profit And No Pay: How The NCAA Is An Ingenious Business
As March Madness gets set to dominate the national discourse, essentially becoming the talk of every town, the NCAA and its 14-year, $10.8 billion contract for broadcasting rights to the men's Division I basketball tournament will become an even easier target for those who find it incredible that, in 2014, college athletes are still not compensated beyond their standard scholarships.
In truth, the debate over whether or not the NCAA should pay college athletes is far more complicated of a matter than it seems and requires consideration of a wide range of implications and knock-on effects for whichever position one might take on the subject. Simply put, there are a bunch of questions that need to be addressed in order to arrive at a credible answer — far too many for this fan, at least.
Besides, it's much more intriguing to strip the mind of such debates and simply look at the NCAA, from a distance, in all its money-making wonder. Quite frankly, even the least entrepreneurial of minds would have to admit that, at face value, college athletics is an ingenious business.
Just think about it. Over the years, the NCAA has seen its total assets more than double (from $282 million to $566 million between 2006 and 2012, according to USA Today) while its revenue generated from television contracts has soared to new heights (a 12-year, $5.6 million deal with ESPN to broadcast the new college football playoffs adds to that $10.8 billion contract with CBS for March Madness).
All of this has occurred while the average amount of a college tuition in America has increased, as well, but certainly not to the degree that the NCAA's revenue has. In layman's terms, while the value of the NCAA's product and revenues continues to soar, the amount in compensation that it must pay to its laborers, those who produce the product, remains relatively unchanged. Revenues up while keeping costs down; it's a CEO's dream. By any token, the NCAA is running an amazing business.
The sheer genius of the structure of the NCAA — a body that was “founded in 1906 to protect young people from the dangerous and exploitive athletics practices of the time” — isn't found in the increase of its growing revenues (up by over $300m since 2006). It's the fact that, even in the face of protests, it actually has half-credible reasons for keeping its “non-profit,” multibillion-dollar contract-signing business the way it is.
Proponents of the NCAA's policy of handing out scholarships (nothing more and nothing less) are right to point out that paying college athletes in a similar fashion to the NBA would destroy the amateur ideal that college athletics so astutely upholds.
They are also right to ask the many questions that spring to mind in trying to envision a pay-for-play system:
“Wouldn't it be unfair if athletes weren't paid evenly? Wouldn't the value of non-revenue sports be undermined? How will it affect the dynamic of the relationship between student-athletes, other students and the schools themselves? Could we even consider paid athletes students at that point? Will they need to be?”
Still, one might spot a sense of fishiness on the part of the NCAA. Indeed, it feels disingenuous to suggest that the NCAA could not find a fair way to reflect its increasing amounts of revenue in the way it compensates the athletes to whom it owes its success. This is, after all, the body that devised a seemingly complex system to share 90 percent of its revenues amongst its hundreds of member colleges and universities.
One might also suppose that for an institution that allows schools to hand out full scholarships for some sports and only partial scholarships for others, the NCAA is perfectly adept at deciding which athletes are more valuable than others, instead of clinging to the apparent need to treat all students “equally.”
And perhaps the NCAA might be able to avoid being labeled a “cartel” in a lawsuit, filed by Clemson football player Martin Jenkins, Rutgers basketball player Johnathan Moore and others, if it didn't seem to always go out of its way to spit in its athletes' faces. Indeed, impeding student-athletes from profiting on their own name, even to the point of taking away a 10 percent scholarship from a Minnesota wrestler for dropping a mix-tape under his own name, does seem a bit much.
Then there's the way students-atheletes are made to wait a year before transferring to other teams while coaches aren't, and the video games that clearly use players likenesses and the jersey sales that do the same and yada-yada…
All of that is unimportant, though. Besides, these types of devil's advocate arguments are only made in the interest of fairness and our interests lie elsewhere, namely in admiring the NCAA. Because, for whatever controversy surrounds it, this money writer can't help but admit: College athletics, with its billions of dollars in revenue and its amateur ideal, is indeed an ingenious business.
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